Correlation Between China Airlines and Tachan Securities
Can any of the company-specific risk be diversified away by investing in both China Airlines and Tachan Securities at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Airlines and Tachan Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Airlines and Tachan Securities Co, you can compare the effects of market volatilities on China Airlines and Tachan Securities and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Airlines with a short position of Tachan Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Airlines and Tachan Securities.
Diversification Opportunities for China Airlines and Tachan Securities
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Tachan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Airlines and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities and China Airlines is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Airlines are associated (or correlated) with Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of China Airlines i.e., China Airlines and Tachan Securities go up and down completely randomly.
Pair Corralation between China Airlines and Tachan Securities
Assuming the 90 days trading horizon China Airlines is expected to generate 2.43 times more return on investment than Tachan Securities. However, China Airlines is 2.43 times more volatile than Tachan Securities Co. It trades about 0.02 of its potential returns per unit of risk. Tachan Securities Co is currently generating about 0.0 per unit of risk. If you would invest 2,610 in China Airlines on October 20, 2024 and sell it today you would earn a total of 10.00 from holding China Airlines or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Airlines vs. Tachan Securities Co
Performance |
| Timeline |
| China Airlines |
| Tachan Securities |
China Airlines and Tachan Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Airlines and Tachan Securities
The main advantage of trading using opposite China Airlines and Tachan Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Airlines position performs unexpectedly, Tachan Securities can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tachan Securities will offset losses from the drop in Tachan Securities' long position.| China Airlines vs. Eva Airways Corp | China Airlines vs. Evergreen Marine Corp | China Airlines vs. Yang Ming Marine | China Airlines vs. China Steel Corp |
| Tachan Securities vs. Hung Sheng Construction | Tachan Securities vs. Mercuries Life Insurance | Tachan Securities vs. YungShin Global Holding | Tachan Securities vs. First Hotel Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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